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RAVIKUMAR ENVS 3521 2/23/2012
23 February 2012 1
GLOBAL CLIMATE CHANGE, FOREST
CONSERVATION & REDD+
Achieving Effectiveness, Efficiency, Equity, & Co-Benefits
ROAD MAP
Climate change problem definition and relationship to forests
Alternative approaches to forest conservation
Introduction to REDD as a global, national and sub-national architecture
REDD+: Alternative perspectives & discussion
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23 February 2012 2
CLIMATE CHANGE: PROBLEM DEFINITION
Problem: Dissonance between current or
expected state of affairs, and a desired current
or future state of affairs
Problem Definition: Goals, Trends, Conditions,
Projections, Alternatives
CLIMATE CHANGE: PROBLEM DEFINITION
Goals: Maintain mean global temperatures, sea levels, and regional precipitation patterns
Trends: Temperatures are increasing, sea and land ice is melting, precipitation patterns are likely to be disrupted
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CLIMATE CHANGE: PROBLEM DEFINITION
Conditioning Factors: CO2 in the atmosphere is
rising, and is linked to global mean
temperatures. Anthropogenic sources of CO2
include fossil fuel emissions (~80%) and land
use change (~20%). Of the latter, tropical
deforestation is hugely important.
CLIMATE CHANGE: PROBLEM DEFINITION
Projections: Population will continue to grow (7
billion in a month), energy demand will
increase, deforestation pressure will increase,
climate change will continue
Alternatives: ????????????????????
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CLIMATE CHANGE: POLICY ALTERNATIVES
Mutually exclusive options:
1. Do nothing (business as usual)
2. Do nothing RE: climate change processes, but
adapt
3. Mitigate (next slide expands) and/or adapt
CLIMATE CHANGE: MITIGATION
Fossil fuel use (~80% CO2)
*
Deforestation and forest degradation (~20% CO2)
Command and control
Taxes and subsidies
REDD+ programs
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CLIMATE CHANGE MITIGATION
247 Gt C in forests (32% of atmospheric)1
Large annual sequestration
Up to 20% (more recently 17%) of global CO2
emissions from deforestation2
1 Saatchi et al. 2011
2 Food and Agricultural Organization of the UN
EQUITY AND POVERTY
~300 million people live in forests
~1.6 billion people depend largely on forest
resources
~60 million indigenous people dependent on
forests
Source: Food and Agricultural Organization of the UN
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WHY CONSERVE FOREST RESOURCES?
Ecosystem services
Equity and poverty (access for the marginalized)
Climate change
Externalities
EXTERNALITIES
A cost or benefit of an economic transaction that is not reflected in the price
The welfare of some agent, either a firm or a household, depends on the activities of some other agent.
e.g., my well is polluted by chemicals from a factory next door; a group of villagers cannot obtain firewood because a timber plant has fenced off the forest
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HOW CAN FORESTS BE CONSERVED?
COMMAND AND CONTROL
Effective
Enforceable
Equitable?
Efficient?
HOW CAN FORESTS BE CONSERVED:
COMMAND AND CONTROL, TAXES AND
SUBSIDIES
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COMMAND AND CONTROL, TAXES & SUBSIDIES
Enforceability: incentive to break the law
Efficiency: we are uncertain about the true
social costs and benefits of deforestation
Equity: some actors benefit, others can lose,
and some are more vulnerable than others
PAYMENTS FOR ENVIRONMENTAL SERVICE:
COASE AND TRANSACTION COSTS 1960 paper “The Problem of Social Cost”
When a party produces an externality, an efficient allocation of resources will be achieved through a free market, as long as property rights are clear
Example: your neighbor has a large tree in his yard, which shades your yard, which you like. It threatens his house, but not yours, so he wants to cut it down. If his perceived risk to his house is equal to or less than the shade’s value to you, you can pay him to not cut down the tree, and everyone wins
What is different about this example and global deforestation?
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PAYMENTS FOR ENVIRONMENTAL SERVICES
(1) a voluntary transaction in which
(2) a well defined environmental service (or a
land use likely to secure that service)
(3) is “bought” by a (minimum of one) buyer
(4) from a (minimum of one) provider
(5) if and only if the provider continuously
secures the provision of the service
(conditionality).
PAYMENTS FOR ENVIRONMENTAL SERVICES
Market-based mechanism
Not command-and-control
Aim is to secure socially optimal provision of environmental goods
And to minimize negative externalities (e.g., Climate Change)
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PAYMENTS FOR ENVIRONMENTAL SERVICES
Area based
Conservation easements
Forest plantations
Green premium
Certified products
Organic agriculture or sustainable
forestry
Public: bigger, lower-cost, but less
efficient and flexible than private
CHALLENGES FACED BY PES
Demand side limitations (willingness to pay)
Supply side uncertainties (institutions and
incentives required)
Communication: experts talking past each other
Monitoring, governance, and enforceability
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CHALLENGES: ADDITIONALITY
• The baseline matters
a lot. And it’s hard to
get a true “baseline”
Source: Wunder 2006
CHALLENGES: LEAKAGE
Leakage
Decreases in deforestation in one area can
be nullified by increases in another.
Source: Angelsen 2009
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CHALLENGES: EFFICIENCY AND FAIRNESS
Consider three applicants:
Forest owner who seeks to convert to soybeans
Cattle ranchers who make less profit than soybean
farmers, but are interested in reducing
deforestation
Indigenous community that values the land but
doesn’t tend to deforest anyway
CHALLENGES: EFFICIENCY AND FAIRNESS
Property rights security is necessary (and not
always present)
Elites can capture benefits
Marginalized people can lose out if appropriate
safeguards are absent (e.g., Indonesia)
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REST OF THIS LECTURE INTRODUCES REDD+, A
GLOBAL FRAMEWORK FOR REDUCING
DEFORESTATION AND FOREST DEGRADATION
CONSIDER THE ABOVE CHALLENGES IN THIS
DISCUSSION, AND THINK CRITICALLY ABOUT THE
BENEFITS AND DRAWBACKS TO REDD+
HOW DO THE ARGUMENTS YOU’VE READ IN
HULME, OKEREKE, AND OTHERS RELATE TO
REDD+/
WHAT IS REDD?
Reducing Emissions from Deforestation and
Forest Degradation in developing countries
Mechanism to create an incentive for
developing countries to protect, better manage
and wisely use their forest resources,
contributing to the global fight against climate
change.
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23 February 2012 14
WHAT IS REDD+?
Reducing Emissions from Deforestation and
Forest Degradation (+Enhancing Forest Carbon
Stocks) in developing countries
National and sub-national programs and
strategies for deforestation that aim to join the
global REDD framework
HOW MIGHT REDD+ LOOK?
Country A
REDD+
Project 1
REDD+
Project 2
Country B REDD+
Projects
Country C REDD+
Projects
United Nations Initiative
(UN-REDD) World Bank Programs
OECD REDD+
supporters
(e.g., Norway, California)
Technical support
Capacity building
Payment distribution
Monitoring and verification
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REDD+: WHERE IS IT NOW?
$169.8 million dollars pledged to UN-REDD directly (Norway, Denmark, Spain, Japan, EC)1
$54.4 million allocated to nine pilot countries
Billions “committed” (e.g., $1 billion from Norway to Indonesia bilaterally)
36 UN-REDD countries, more REDD+ projects
REDD+ AND PES
REDD+ projects are *not* necessarily PES
Any reduction in deforestation/forest degradation
may be eligible
Some REDD+ projects may be PES schemes
Should all projects be treated equally?
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REDD+ CHALLENGES
Additionality
Leakage
Transaction costs (are the above included in this?) Contract negotiation
Monitoring, reporting and verification
Enforcement of contracts
Equity and unintended consequences
REDD+ TRANSACTION COSTS
Contract negotiation
Who owns the land?
Who uses the land?
Who protects the land?
de facto vs. de jure rights?
Sorting this all out is costly
State Forest
Historical
community
Timber
concession
Municipality
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REDD+ TRANSACTION COSTS
Monitoring and verification: incentives
Donors may want cheap credits
Sellers may want low enforcement (high returns)
Monitoring and verification: questions
Who should monitor?
What should be monitored and how?
REDD+: TRANSACTION COSTS
Enforcement
Can payments reliably be withheld?
What if sellers fail to reduce deforestation for very
good reasons?
Who should enforce contracts?
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REDD+: A STEP BACK
Is this the best option on the table?
What does it take to justify a policy like this?
How effective do you think it will be?
How efficient?
How equitable?
REDD+: TWO ALTERNATIVE PERSPECTIVES
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REDD+: TWO ALTERNATIVE PERSPECTIVES
QUESTIONS?
Ashwin Ravikumar